The Mexican peso futures contract is trading at 0.07713 $/MXN. Contract size for the Mexican peso future
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Question:
The Mexican peso futures contract is trading at 0.07713 $/MXN. Contract size for the Mexican peso future is 500,000 pesos. You believe the spot price will be 0.08365 $/MXN at expiration. What speculative position would you enter into to profit from your beliefs? Calculate your anticipated profits assuming you take a position in three contracts. What is the size of your profit or loss if the futures price is indeed an unbiased predictor of the future spot price and this price materializes?
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